Mexico president-elect hails passage of public sector pay cuts

MEXICO CITY (Reuters) - Mexico’s President-elect Andres Manuel Lopez Obrador on Friday hailed steps by the new Congress to cut the salaries of government officials, part of a raft of measures he promised to battle corruption and inequality.

Mexico's President-elect Andres Manuel Lopez Obrador arrives to his campaign headquarters in Mexico City, Mexico September 13, 2018. REUTERS/Henry Romero

Driven by Lopez Obrador’s leftist National Regeneration Movement (MORENA), the lower house of Congress late on Thursday passed a law that will cap all salaries for officials at the president’s wage or below.

Lopez Obrador, who takes office on Dec. 1, won a landslide victory in July after pledging to save billions of dollars through anti-corruption and austerity measures to fund scholarships for students, pensions for the elderly and infrastructure projects in Mexico’s poor south.

MORENA and its allies have a majority in both houses and made passing the salary bill their first legislative priority since the new Congress began in September.

“We’re going to lower the salaries of those on top because this way we can save in order to attend to the demands of justice,” Lopez Obrador said at a town hall-style meeting on security in Mexico City.

Lopez Obrador vowed to cut his own salary to 40 percent of what outgoing President Enrique Pena Nieto earns to 108,000 pesos ($5,718) per month - a sum well below many high-paying government jobs in the current administration.

He has also promised to waive his bodyguards and sell the presidential jet as well as a fleet of government aircraft. New lawmakers are also making a show of cutting spending.

Earlier this week, the new head of the Senate, MORENA’s Marti Batres, launched a “Tupperware Challenge” on social media, where he asked lawmakers to bring their own lunch rather than take advantage of government-funded meals at their offices.

Some opposition lawmakers ridiculed the move as a populist stunt.

Local media have reported the cuts could hit around 35,000 officials currently earning more than Lopez Obrador’s proposed wage.

Lawmakers from smaller parties warned the move could lead to an exodus of officials from well-paid technical jobs in key ministries such as communications, energy and finance.

A bill stipulating that no public sector worker should earn more than the president was approved by the Senate seven years ago, but was not taken up under Pena Nieto’s administration.

On Friday, Lopez Obrador also said the bill would allow him to fulfill another campaign promise - to end generous pensions enjoyed by former Mexican presidents.

Reporting by Veronica Gomez and Michael O’Boyle; Editing by Marguerita Choy